BPL gets new lease on life as rural broadband solution

Rural broadband over powerline service might thrive, even as a footnote to …

Remember how we said that broadband over powerline (BPL) technology was pushing up the daisies? A small firm, International Broadband Electric Communications, has started plans to spend $70 million to prove otherwise. IBEC's move to equip utilities in several states with BPL and smart grid technology only reinforces our (and others') thesis, however.

IBEC said today it would pay IBM $9.6 million to handle installing BPL gear at electric cooperatives in the eastern US; the company expects to spend $70 million overall. These co-ops serve rural customers, who are typically unable to get any wireline broadband, and sometimes have poor results with dial-up service as well. Relatively slow and expensive satellite broadband is all that's available above dial-up in these areas.

The Associated Press reported that IBM is fairly excited about the potential of becoming an expert in how to manage and install these networks, even though they are a contractor here, not investing in IBEC. While IBEC will act as the Internet service provider, IBM's global reach for building out services might allow the company to become the best firm to turn to for these deployments, even if it's still a niche market. In the developing world, there may turn out to be much more potential for BPL, for instance, where an electrical infrastructure is the only wire that reaches far enough.

IBM's interest combined with IBEC's focus on rural is where our previous take seems to still stick. We argued that BPL as a mainstream, competitive third broadband pipe into the home was exploded as an idea. After several years of pilot projects and announced—then canceled—major deployments, the FCC reported that only 5,420 subscribers for BPL services were in place as of June 30, 2007, the latest date for which statistics were collected. On the same date, the FCC found nearly 35 million cable and 29 million DSL subscribers. Even fixed wireless, using WiFi or other standards, had 590,000 subscribers.

But BPL has real merit in rural areas, especially where wireless won't work due to tree cover, topology, or sparseness. That's the market IBEC is targeting. Bringing 256Kbps to 3Mbps to an audience that might achieve 28.8 Kbps on a good day is a giant leap forward for access, even if those subscribers won't see 5 Mbps or 20 Mbps any time soon.

IBEC charges from $29.95 per month for symmetric 256Kbps up to $89.95 per month for 3Mbps for residential service, and $69.95 to $229.95 per month for the same range for businesses. In early co-op tests, a $99 setup fee includes a BPL modem. By contrast, satellite provider WildBlue charges $200 to $300 for activation and equipment, requires a two-year commitment, and prices broadband from $49.95 for 512Kbps/128Kbps to $79.95 for 1.5Mbps/256Kbps. HughesNet offers satellite broadband for $300 to $340 for activation and gear, requires a two-year commitment, and has plans from $59.99 for 1Mbps/128Kbps to $349.99 for 5Mbps/300Kbps.

IBEC will pass 340,000 customers across seven states—Alabama, Indiana, Maryland, Pennsylvania, Texas, Virginia, and Wisconsin—of which, IBEC's president told the Associated Press, 86 percent have no access to wireline broadband. The company currently serves about 1,400 customers.

The same technology used for BPL can handle smart-grid applications, such as smart meters that provide live usage data to utilities; video surveillance cameras on utility poles to monitor for downed lines or other problems, a huge issue with rural electrical systems; and remote control of gear at switching stations.